India’s Data Center market is experiencing robust growth driven by a significant increase in virtualization, cloud computing, and public data generation.
The market is projected to grow at a CAGR of 12 percent from 2019 to 2024. Additionally, NASSCOM forecasts that cloud spending will grow at a CAGR of 30 percent, reaching $7.1 Billion annually by 2022.
India stands as the world’s second-fastest-growing digital economy, with the IT & Communication sector set to double by 2025, contributing nearly $400 billion to the Indian GDP.
In August 2023, Parliament approved the Digital Personal Data Protection Bill, empowering sectoral regulators to enforce local data storage mandates in key sectors, thereby promoting local storage of the data gathered within India.
Highlighted below are a few data centre stocks poised for substantial growth in the coming years:
Black Box Limited
With a market capitalisation of Rs. 6,723 crores, the shares of an IT solutions provider company surged 3.3 percent on BSE to Rs. 412 on Thursday, as against its previous closing price of Rs. 398.8.
Black Box aims for a 10 percent operating margin and is confident in achieving this goal. By FY24-25, it targets revenues of Rs. 6,600 crore to Rs. 6,900 crore (up 5-10 percent), normalised EBITDA of Rs. 525 crore to Rs. 560 crore (up 23-31 percent), and net profits of Rs. 220 crore to Rs. 250 crore (up 59-81 percent).
The company’s key growth drivers include focusing on the top 250 customers, the addition of large new clients, pursuing inorganic growth opportunities, and focusing on operational efficiencies and optimising operating costs.
During FY23-24, Black Box secured large deals exceeding $150 million in infrastructure, 5G LTE solutions, and data centres. The company remains committed to prioritising large customers and deals moving forward.
Financially, the company experienced a fall in its revenue from operations, showing a year-on-year decline of around 12 percent from Rs. 1,682 crore in Q4 FY22-23 to Rs. 1,480.3 crore in Q4 FY23-24.
However, its net profit increased during the same period from Rs. 23 crore to Rs. 41 crore, indicating a growth of 78.3 percent YoY.
Over the past one year, the stock has delivered positive returns of nearly 99.6 percent, as well as about 35.7 percent returns year-to-date.
Black Box Limited, previously known as AGC Networks Limited, is an IT solutions provider delivering advanced technology solutions and consulting services to businesses worldwide.
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With a market capitalisation of Rs. 8,259.4 crores, the shares of a global technology solutions provider surged nearly 0.5 percent on BSE to Rs. 1,513.8 on Thursday, as against its previous closing price of Rs. 1,506.65.
In FY24-25, the management expects to continue its growth trajectory with organic revenue expected to grow by 30-35 percent. EBITDA and PAT margins are projected to remain stable, with EBITDA ranging between 20 percent and 22 percent, and PAT between 15 percent and 16 percent.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 30 percent from Rs. 190.6 crore in Q4 FY22-23 to Rs. 246.8 crore in Q4 FY23-24.
Similarly, its net profit increased during the same period from Rs. 26.6 crore to Rs. 39.5 crore, indicating a growth of 48.5 percent YoY.
Over the past one year, the stock has delivered multibagger returns of nearly 203.8 percent, and about 34.6 percent of positive returns year-to-date.
Aurionpro Solutions Limited is engaged in providing advanced technology solutions in the banking, mobility, payments and government sectors, and is organised into three primary business lines: Cybersecurity, Digital Innovation and Banking Industry Solutions.
The company provide solutions in corporate banking, treasury, fraud prevention and risk management, internet banking, governance and compliance.
Anant Raj Limited
With a market capitalisation of Rs. 16,344 crores, the stock surged 1.2 percent on BSE to Rs. 488 on Thursday, as against its previous closing price of Rs. 482.1.
The company is poised for substantial growth in the next 4 to 5 years through data centre expansion, aiming to scale up to a 307 MW IT Load Data Center. This initiative is part of their strategy to enhance cloud services, which are expected to yield significantly higher rental income.
By December 2024, they are also targeting to achieve zero net debt status.
Additionally, the company plans to convert existing 5.66 million sq. ft. commercial property into a 157 MW Data Centre, with further expansion projects in Rai and Panchkula totalling another 150 MW.
Once the 307 MW capacity is fully operational, expected rentals are projected to reach Rs. 3,300 crores.
Moreover, Anant Raj Cloud Pvt. Ltd., a wholly-owned subsidiary of ARL, has formed a strategic alliance with TCIL (Telecommunications Consultants India Limited) for Data Centers (cloud and colocation services).
TCIL is a wholly owned Government of India undertaking & largest telecom engineering public sector enterprise in India.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 58 percent from Rs. 280.2 crore in Q4 FY22-23 to Rs. 442.6 crore in Q4 FY23-24.
Similarly, its net profit increased during the same period from Rs. 46.3 crore to Rs. 87.7 crore, indicating a growth of 89.4 percent YoY.
Over the past one year, the stock has delivered multibagger returns of nearly 148.4 percent, and about 61.2 percent of positive returns year-to-date.
Established in 1969, Anant Raj Limited is engaged in the real estate development, construction and infrastructure development sectors.
The company has a diverse portfolio of projects, including integrated residential townships, group housing, IT parks, hotels, commercial complexes, malls, service apartments, warehousing and data centres.
Written by Shivani Singh
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